Haryana hurricane

Indian Express, 19 September 2007

The regional
distribution of investment in states offer some surprises and
reinforces some stereotypes. Haryana and Orissa are witnessing big
gains in investment, while Rajasthan, U.P and Bihar remain BIMARU.

We examine data on projects under implementation in
various states in the CMIE Capex data base. We compare data for June
2007 with June 2005 to assess how a state has fared on investment
compared to its previous performance. For proper comparison we rank
states acccording to projects under implementation on a per capita
basis. See table below.

The most striking change is in Haryana which has seen the
biggest change in investment. Ten years ago, it was at rank 14 and
five years ago it was at rank 13. Now, it stands at rank 1, with
investment under implementation of Rs.78,500 per capita.

Orissa is also a major gainer, particularly over the last
five years. It went from rank 8 to rank 2 over the last five years.
While the Indian average for projects under implementation on a per
capita basis grew by 93%, Orissa gained by 381% over the last five
years to reach Rs.61,811 of investment per capita.

Himachal Pradesh has seen sluggish growth of just 14%
compared with five years ago. It has slipped from rank 1 to rank 3,
and now has investment of Rs.58,974 per capita.

Gujarat witnessed growth of 85%, which was slightly worse
than the national average growth of 93%, in the last five years. It
now stands at rank 4, with investment per capita of Rs.41,585.

Uttarakhand grew a little worse than Gujarat, gaining 73%
to go from rank 3 to rank 5. It now has per capita investment under
implementation of Rs.34,858.

Jharkhand has got dramatic growth of 331% in the last
five years, and has thus gone from rank 14 to rank 6. It now has per
capita investment of Rs.33,828.

Karnataka gets written about as doing well in IT, but the
situation on investment is not good. While the Indian average gained
93% over the last five years, Karnataka gained only 59%. It hence
went from rank 5 to rank 7. It now has per capita investment under
implementation of Rs.30,560.

Andhra Pradesh has had growth of 80%, which is similar to
the national average of 93%. With this, it stands at rank 8, with
investment of Rs.22,317 per capita.

Tamil Nadu has done shockingly badly in the last five
years. In 2002, Tamil Nadu was at rank 4, with investment of
Rs.19,981 per capita - this was almost double of the national
average. In the last five years, it witnessed growth of only 1% while
the national average moved forward by 93%. Today, Tamil Nadu is at
investment under implementation of Rs.20,243 per capita, which is
just a bit ahead of the national average. It has dropped to rank 9
compared with rank 4.

Maharashtra has also underperformed in the last five
years. It got growth of just 50% while the national average grew by
93%. It went from rank 7 to rank 10. It is now just slightly above
the national average with investment under implementation of
Rs.19,303 per capita.

Jammu and Kashmir has got poor growth of just 22% over
the last five years, much below the national average of 93%. With
this, it ends up at rank 11 with investment per capita essentially at
the national average of Rs.19,091.

The remaining states have investment per capita of below
the national average of Rs.18,901 per capita.

Chattisgarh has grown in line with the national average
growth and stands at Rs.18,582 of per capita investment under
implementation.

Kerala got poor growth of 73% while the national average
grew by 93%. It has dropped from rank 10 to rank 13 in the last five
years, and now has investment per capita of Rs.18,110.

Punjab has done badly, dropping from rank 11 to rank 14
with growth of just 52%. It now stands at Rs.15,861 per capita,
clearly behind the national average of Rs.18,901.

West Bengal has gained dramatically over the last five
years, growing by 202% while the national average rose by 93%.
Through this, it went up from rank 17 to rank 15. However, in
absolute terms, the situation is poor, with investment of Rs.14,467
per capita, which is behind the national average.

The bottom five slots in the ranking are occupied by
Assam and the BIMARU states. Of these, Madhya Pradesh and Assam have
got credible growth rates of 80% and 87%, both of which are within
striking range of the overall average growth of 93%. Uttar Pradesh
has done poorly in the last five years, but it managed growth of 64%,
which is not that far from 93%.

It is interesting to note that the states of Chattisgarh,
Jharkhand and Uttarakhand, all of which are breakaways from BIMARU
states, appear to be faring better than the BIMARU states themselves.
While BIMARU states are a problem, the number of people who are
living in BIMARU states is much lower than it was before these three
new states were created.

The worst situation is found in Rajasthan and Bihar.
Rajasthan got growth of 10% and Bihar got growth of -3%. Rajasthan
now has investment of Rs.5304 per capita and Bihar is at Rs.2911 per
capita - both of which are vastly below the national average of
Rs.18,901 per capita.